The failure of a Des Moines restaurant chain to fully comply with a federal anti-identity theft law will soon lead to free soft drinks for some of its former patrons, assuming a federal judge approves.

Lawyers in a complicated class-action lawsuit have submitted a proposed settlement that will, if it is approved by U.S. District Judge James Gritzner, eventually lead to $170,000 for the plaintiffs' attorneys and coupons for people who can prove they used a credit card or debit card during a three-year period at Palmer's Deli & Market.

The lawsuit, filed initially on June 1, 2011, accused Palmer's of willfully violating a 2003 federal law that requires the truncation of credit card numbers and expiration dates on printed store receipts. Court papers allege that Palmer's exposed customers to possible identity theft by printing full card expiration dates on its receipts despite well-publicized industry warnings that such practices are prohibited by the U.S. Fair and Accurate Credit Transactions Act.

The law includes statutory penalties requiring merchants to pay between $100 and $1,000 for each "willful violation" of its rules.

The proposed settlement averts the need for plaintiffs' lawyers to prove that the violations were "willful," according to documents filed Monday with the federal court in Des Moines.

The deal also avoids financial ruin for Palmer's, which court papers say processed nearly 754,000 credit and debit card transactions at its five locations between June 3, 2008, and May 30, 2011.

A still-pending lawsuit by Palmer's insurance company blames the restaurant and argues that the insurance company shouldn't have to pay.

Documents filed by Palmer's in January warned that "if the class ends up consisting of say 100,000 individuals, and Palmer's does not have insurance coverage for this matter, that would be the end of Palmer's."

James Carney, lawyer for owner Joe Palmer, stressed Tuesday that expiration dates, not card numbers, were printed on receipts. Palmer relied on a processing company to handle the matter, Carney said, and it's subsequently been fixed.

"There are all kinds of businesses operating today that don't have the expiration date truncated," Carney said. "The retailers don't know about this stuff. It's the card processors."

Court papers say Palmer's has agreed as part of the proposed settlement to provide a free soft drink with a $5 purchase to anyone who can prove that he or she used a credit or debit card at Palmer's during the period covered by the case.

Documents say claims will be accepted during an unspecified six-week period that will begin with Palmer's posting signs and publishing advertisements to let people know about the deal.

To be declared valid, claims will have to be backed up by either original store receipts (showing a card expiration date) or credit card statements showing that a credit or debit transaction was made at a Palmer's.

The relatively minor recovery by class members is part of long-standing criticism of class-action lawsuits.

"There have been concerns in consumer cases for years that coupons are not full and complete settlement in the interest of the plaintiffs," said Russell Lovell, a Drake University law professor. "My instincts would tell me that usually the kind of paperwork to put in a claim would be sufficiently burdensome that people wouldn't think it would be worth it."

Customers at the Palmer's Market and Deli location at 2843 Ingersoll Ave. on Tuesday didn't seem too worried about the proposed settlement.

Kathi Slaughter of Des Moines said that she's been a customer for years and that the lawsuit isn't going to change her perception of a great local business. Slaughter said the Palmers would not do anything to put customers at risk.

"They'll do anything for you," she said.

She said she's sure she's entitled to a free drink but won't try to collect.

Mike and Kim Jacoby, both 26, of Des Moines said they have been coming to Palmer's for three years. They weren't sure whether they would be entitled to a free drink because they normally don't use cards.

But even if they were, they wouldn't try to collect. Both said the situation doesn't change their thoughts about the store.

Court papers say Palmer's has agreed to pay an additional $2,000 each to David Michael Batchelder and Robert Tomkins, the two initial plaintiffs in the lawsuit, as well as buy a year's worth of LifeLock identity theft protection for anyone who can prove "a substantial link" between a Palmer's receipt and problems with identity theft during the three-year period.

Court documents say the lead plaintiffs spent a total of $23.62 at Palmer's in May 2011. (Carney identified one of the plaintiffs as a law student.)

Plaintiffs' lawyers — court papers list two law firms, in Kansas City and Omaha — will receive $170,000 from Palmer's to cover costs and fees, according to the settlement. Documents also describe "a side agreement with defendants' insurers to insure that sufficient security for payments from defendant and the insurers were made."

The agreement has been designated as confidential, but the parties will produce the agreement for inspection if the court so requests.

The above statements do not represent those of Weston Legal or Michael Weston and they have not been reviewed for accuracy. The statements have been published by a third party and are being linked to by our website only because they contain information relating to debt. Nothing in this article should be construed as legal advice given by Weston Legal or Michael Weston. To view the source of the article, please following the link to the website that published the article. Articles written by Michael W. Weston can be viewed here: To report any problem with this article please email creditcardlawsuit@westonlegal.com